Companies like Paytm (Run by One97 Communications), PayU India, MobiKwik (One MobiKwik Systems Pvt. Ltd), Freecharge (the payments arm of e-commerce marketplace Snapdeal) are already seeing results, in the few hours since the announcement on Tuesday late evening.
For wallet firms, which usually rely on cash back offers to lure customers, the announcement has proved to be the big boost needed to gain traction and a bigger mindshare among consumers.
Paytm, for instance, has said that it has seen a 250% spike in overall transactions, which includes a 400% increase in offline payment transactions. PayU India has registered an 80% jump in transactions on Wednesday, as of 12:30 pm, compared to Tuesday, according to chief executive officer Amrish Rau.
“We usually have 12 lakh transactions being done every day through PayU, on Wednesday it’s 25 lakh," said Rau.
Freecharge claimed that the average wallet balance on its platform increased 12 times since the announcement, while the transaction value in terms of rupees on Paytm, increased by 200%, according to the firm. Paytm also said it saw a 435% increase in traffic and 200% rise in the number of app downloads it usually records.
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Trupay, which enables peer-to-peer as well as merchant payments, registered about Rs80 lakh worth transactions in the first half of Wednesday, compared to the Rs20 lakh worth transactions it does on any other day, according to Rahul Gochhwal, co-founder, Trupay.
Most wallet firms also concentrate on enabling offline payments by tying up merchants who then accept money through the wallets from the consumers. Given the urgent need for alternatives to using Rs500 and Rs1000 notes, companies in the digital payment ecosystem have also registered a spike in inbound interest from merchants.
“The merchants who were slow in responding to us have been calling us to get on-boarded immediately, and those who were sceptical about digital payments are also changing their minds because of the announcement," said Upasana Taku, co-founder, MobiKwik.
“The number of downloads increased 10 fold on Wednesday morning. By the end of Wednesday, we expect total transaction value to reach Rs1.5 crore. Also, on a usual day, 10% of (total) transactions are peer to merchant, which also increased to 20%," said Trupay’s Gochhwal.
The spurt in transactions and interest from merchants has also meant that companies are scrambling to keep up with it and are devoting additional operations and engineering resources to meet the growing demand.
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Bengaluru-based Ezetap, which makes its own point-of-sale devices to enable merchants to receive digital payments, saw a 25% spike in transactions so far, and has “significantly ramped up" the production of its devices since the announcement to cater to the increase in demand.
“This is a trigger where merchants realize that digital payments are not just nice to have, but critical in serving customers," said Abhijit Bose, chief executive officer, Ezetap.
Consumers are also looking for alternatives to traditional digital payment instruments like wallets, with bitcoin companies like Zebpay too seeing an increase in interest.
Zebpay, which usually adds 1,000 new users every day, has added about 2,000 new users in the first half of Wednesday, according to Sandeep Goenka, co-founder, Zebpay.